“Since 2006, value stocks (IVE vs IVW) have underperformed 11 of the 13 calendar years and when they beat growth, it wasn’t by much. Cumulatively, through this week, it has been a 122% differential (up 52% for value vs up 174% for growth). This appears to be the longest and most severe drought for value investors since data collection began. It will go our way eventually as there are too many people paying far too much for today’s darlings, both public and private. Further, the ten-year yield of 2.5% (pre-tax) isn’t attractive nor is real estate. We believe the value part of the global equity market is the only place to earn solid risk adjusted returns and we believe those returns will be higher than normal,” said Vilas Fund in its Q1 investor letter. We aren’t sure whether value stocks outperform growth, but we follow hedge fund investor letters to understand where the markets and stocks might be going. This article will lay out and discuss the hedge fund and institutional investor sentiment towards Hyster-Yale Materials Handling Inc (NYSE:HY).
Hyster-Yale Materials Handling Inc (NYSE:HY) shareholders have witnessed an increase in activity from the world’s largest hedge funds recently. HY was in 12 hedge funds’ portfolios at the end of June. There were 11 hedge funds in our database with HY positions at the end of the previous quarter. Our calculations also showed that HY isn’t among the 30 most popular stocks among hedge funds (see the video below).
Video: Click the image to watch our video about the top 5 most popular hedge fund stocks.
If you’d ask most traders, hedge funds are viewed as slow, old financial vehicles of years past. While there are greater than 8000 funds with their doors open at the moment, Our experts hone in on the masters of this group, approximately 750 funds. These investment experts manage the majority of the smart money’s total capital, and by paying attention to their unrivaled picks, Insider Monkey has discovered many investment strategies that have historically surpassed the S&P 500 index. Insider Monkey’s flagship hedge fund strategy outpaced the S&P 500 index by around 5 percentage points a year since its inception in May 2014. We were able to generate large returns even by identifying short candidates. Our portfolio of short stocks lost 25.7% since February 2017 (through September 30th) even though the market was up more than 33% during the same period. We just shared a list of 10 short targets in our latest quarterly update .
Unlike former hedge manager, Dr. Steve Sjuggerud, who is convinced Dow will soar past 40000, our long-short investment strategy doesn’t rely on bull markets to deliver double digit returns. We only rely on hedge fund buy/sell signals. Let’s take a look at the recent hedge fund action surrounding Hyster-Yale Materials Handling Inc (NYSE:HY).
How are hedge funds trading Hyster-Yale Materials Handling Inc (NYSE:HY)?
Heading into the third quarter of 2019, a total of 12 of the hedge funds tracked by Insider Monkey were long this stock, a change of 9% from the previous quarter. Below, you can check out the change in hedge fund sentiment towards HY over the last 16 quarters. With the smart money’s capital changing hands, there exists a few noteworthy hedge fund managers who were increasing their holdings substantially (or already accumulated large positions).
More specifically, Royce & Associates was the largest shareholder of Hyster-Yale Materials Handling Inc (NYSE:HY), with a stake worth $12.5 million reported as of the end of March. Trailing Royce & Associates was Diamond Hill Capital, which amassed a stake valued at $9.7 million. Fisher Asset Management, Millennium Management, and Two Sigma Advisors were also very fond of the stock, giving the stock large weights in their portfolios.
With a general bullishness amongst the heavyweights, some big names were breaking ground themselves. Citadel Investment Group, managed by Ken Griffin, created the most outsized position in Hyster-Yale Materials Handling Inc (NYSE:HY). Citadel Investment Group had $0.5 million invested in the company at the end of the quarter. Minhua Zhang’s Weld Capital Management also initiated a $0.4 million position during the quarter. The other funds with brand new HY positions are Matthew Hulsizer’s PEAK6 Capital Management and Matthew Hulsizer’s PEAK6 Capital Management.
Let’s now review hedge fund activity in other stocks similar to Hyster-Yale Materials Handling Inc (NYSE:HY). We will take a look at Trueblue Inc (NYSE:TBI), Forrester Research, Inc. (NASDAQ:FORR), The Andersons, Inc. (NASDAQ:ANDE), and TPI Composites, Inc. (NASDAQ:TPIC). All of these stocks’ market caps match HY’s market cap.
| Ticker | No of HFs with positions | Total Value of HF Positions (x1000) | Change in HF Position |
|---|---|---|---|
| TBI | 15 | 83342 | -2 |
| FORR | 10 | 61046 | -3 |
| ANDE | 5 | 37702 | -3 |
| TPIC | 16 | 169109 | -3 |
| Average | 11.5 | 87800 | -2.75 |
View table here if you experience formatting issues.
As you can see these stocks had an average of 11.5 hedge funds with bullish positions and the average amount invested in these stocks was $88 million. That figure was $36 million in HY’s case. TPI Composites, Inc. (NASDAQ:TPIC) is the most popular stock in this table. On the other hand The Andersons, Inc. (NASDAQ:ANDE) is the least popular one with only 5 bullish hedge fund positions. Hyster-Yale Materials Handling Inc (NYSE:HY) is not the most popular stock in this group but hedge fund interest is still above average. This is a slightly positive signal but we’d rather spend our time researching stocks that hedge funds are piling on. Our calculations showed that top 20 most popular stocks among hedge funds returned 24.4% in 2019 through September 30th and outperformed the S&P 500 ETF (SPY) by 4 percentage points. Unfortunately HY wasn’t nearly as popular as these 20 stocks and hedge funds that were betting on HY were disappointed as the stock returned -0.4% during the third quarter and underperformed the market. If you are interested in investing in large cap stocks with huge upside potential, you should check out the top 20 most popular stocks among hedge funds as many of these stocks already outperformed the market so far this year.
Disclosure: None. This article was originally published at Insider Monkey.
